Why you shouldn’t sell your business without first defining its brand

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Photo edited by Jerome Paronneau.

If you’re thinking of selling the successful business you’ve spent years building up, you need to also spend some time on defining its brand.

It may sound obvious to some, perhaps less so to others, but Josh Tilley, Brand Strategy Director at Initials CX, believes that showcasing your company’s wider strengths could be key to securing the best investor…

Josh Tilley
Josh Tilley, Initials CX.

Many B2B business owners reach a stage where they’ll be looking to sell their company (or perhaps deliberately set out in the first place with that intention).

But one critical factor they often overlook is that potential investors are less likely to buy a business without it having a clear brand.

After all, you could be the country’s biggest supplier of nuts and bolts, and that expertise might be enough to put your firm on the market with a hefty price tag.

But doing so without showcasing the wider strengths about the organisation – the coherent brand or golden thread running throughout your operations – means you’re passing up the chance to exponentially build the value of the sale and could miss out on potential investors.

Why is brand so critical to a sale?

As soon as you start talking about brand, people’s minds immediately jump to advertising, comms and logos. But it’s so much more.

The old saying goes that your brand is what people say about your business when you aren’t in the room. Brand goes beyond simply having the best product or service on the market.

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Recognition: Brand is what they say about you when you’re not in the room.

And it can create a vision and ethos that lives long in the business – and the minds of its customers – even when you’re no longer involved.

Potential investors are generally looking to acquire more than just a business’s operations.

They aren’t simply buying production lines, warehouses or distribution deals – they’re also buying into your values, personality, commitment to customer service and other aspects that exist as part of your brand.

Much like with both B2B and consumer businesses, a brand is a composite of all the elements that add value to your business.

If you are known for quality, dedication, entrepreneurialism, or even just being solidly reliable, these defining values attract top investors when they are on the acquisition trail.

Look at Slack, which was purchased by Salesforce in 2020 for $28bn. Feel free to disagree, but there is no real difference between Slack, Zoom or Microsoft Teams in terms of functionality.

What separated Slack from its competitors was the way it presented itself as a brand: the go-to comms platform of successful companies to connect their workforce.

A modern, progressive place to bring colleagues together. This made it an aspirational platform for companies to get involved with, creating that unique selling point for investors.

As such, if everything else is equal when it comes to the commercials, it’s your brand that will give your business the edge.

How can B2B businesses create a distinctive brand?

During a recent conversation I had with the founder of a global B2B business, the purpose of their organisation was crystal clear.

However, they recognised that as their business grew, their control over the clarity of the brand had diminished because the founder couldn’t personally showcase what made his business so good to every client anymore.

That’s why it’s imperative to distil everything brand related in a way that is easily understood throughout your business.

As a business leader you must crystallise what the business does, and what you want the brand to become.

If you aren’t clear about your brand, how can you expect other people in the business to be, let alone potential investors?

Image by Bruno from Pixabay
On target: Companies need to pinpoint and distil their brand for investors.

After all, if they don’t think your brand will have longevity without your continued involvement, your business may not be valued as high as you hoped (or key personnel could be tied in for a very long period after acquisition).

It’s therefore crucial to define and demonstrate your brand proposition as clearly as possible. That goes without saying for consumer and B2B brands, though obviously a need to recognise that a B2B audience is different to that of your consumer-facing counterparts.

Your customer base will likely be more niche – or, at least, the pool of decision-makers narrower – so it’s vital to nail down what they want from your business.

As a consumer brand you can often afford to be bold and disrupt the market, as that’s a popular (though not easy) route to success.

However, B2B brands arguably might make a less seismic impact due to the relative functionality and risk aversion of the market.

For example, an insurance company looking for antivirus software will probably prefer to do business with a company known for quality and reliability, rather than extravagance and rebellion.

So whilst your day-to-day processes have the biggest effect on your revenue and profit, brand has a huge impact on the organisation’s overall value.

This is true whether your venture makes nuts and bolts, sells business travel, or makes groundbreaking medicine.

It’s as simple as the reason why investors should buy into your business rather than a competitor – whether you’re fighting for funds – or a future sale.